Did you know that all employees are entitled to 5.6 weeks statutory paid leave each year?
Did you also know there is no legal obligation to give staff the bank holiday time off? But you do need to include it as part of their 5.6 weeks paid leave entitlement.
A 5-day week employee would have an entitlement of 28 days leave (5.6 x 5), but an employee working one day a week would only be entitled to 5.6 days, even though their leave entitlement is also 5.6 weeks. This is because 5.6 x 1 day = 5.6 days.
One of the most often asked questions is what happens when an employee leaves part way through the year. Pro rate is the answer. This is achieved by determining the number of calendar days of active employment in the year, converting it to a 365 fraction, multiplying this by the number of days entitlement, and deducting any days already taken.
So, a 5-day week employee who leaves 200 days into the holiday year and has already taken 10 days including bank holidays, would have a prorated entitlement of;
(28 x 200/365) = 15.3 days
Taking off 10 days already taken = 5.3 days remaining.
The calculation is so much simpler than under the old rules where bank holidays were not included as part of statutory paid entitlement. If an employee was also part time, and didn’t work Mondays, this could present a real challenge!
From a contractual aspect, it is important to make clear what happens with untaken or overbooked leave when an employee’s contract ceases. Normally, there would be a paragraph in the contract of employment setting this out.
Finally, keep in mind that any additional leave you add to the statutory entitlement (known as contractual leave) can be treated differently, in that there is no obligation to pay an untaken balance. It is important to also make this clear in the contract of employment.